Canadian Rail Interests Fear Issues Surrounding Blockades Are Not Over

Although police have cleared a two-week protest blocking a segment of Canadian National's NYSE: CNI) rail line near Belleville, Ontario, it's still unknown when operations along Canada's rail supply chain will return to normal.

Canadian National (CN) has not yet formally said when it will resume its eastern operations, although local reports say the railway has begun to move on track that was previously blocked. CN had shut down its eastern operations nearly two weeks ago because of the blockade near Belleville.

CN didn't return a request for comment by press time.

The Ontario Provincial Police dismantled the Belleville blockade on Tuesday. But since then, isolated and relatively short-lived blockades of roadway intersections and freight and passenger rail tracks have been occurring throughout the country, according to numerous local reports.

Rail blockades reportedly also have occurred on portions of Canadian Pacific‘s CP network, including one south of Montreal in the Mohawk territory of Kahnawake. That blockade was ongoing as of 2 p.m. ET today, according a report from the Canadian Broadcasting Corp.

CP said it didn't have anything to add on the blockades that have been occurring.

Protesters began blocking portions of the freight rail network after Feb. 6 in support of a First Nations group's objections to a proposed pipeline location in British Columbia. A blockade in Mohawk territory near Belleville began in solidarity with efforts by the hereditary leaders of the Wet'suwet'en First Nation in British Columbia to fight the proposed route of the Coastal GasLink pipeline through their territory in British Columbia.

But the blockades brought freight to a standstill on a key portion of CN's network, causing supply chain disruptions throughout Canada. Government officials have said they have been working with provincial and First Nations leaders to find a peaceful resolution to the protests.

Because of the uncertainty of whether the protests would continue, industry groups again pressed for continued government action.

"The widespread collateral damage of these protests is grinding our entire industry to a halt and is taking a massive toll on farmers across this country," said Canadian Federation of Agriculture President Mary Robinson at a Tuesday press conference. 

Farmers in eastern Canada need propane to heat animals' barns, and the trucking sector doesn't have the capacity to fill the need normally covered by rail, Robinson said.

While CN and CP reportedly have been working together to move freight in light of the rail blockades, those efforts have been for trains heading westward and not eastward, she said.

"We understand that that movement has been just to the West and nothing to the East, and so as we look to the issue of propane for heating barns and feed to get to animals on the East Coast and in Quebec, that I don't believe has been addressed," Robinson said.

The association hasn't reached the point where it is considering asking the federal government for emergency assistance or compensation, but the rail blockades capped what has been a challenging year for Canadian farmers, she said.

"Our main focus is to ensure that we see rail reinstated and get back to business. That is certainly where we've been focusing our efforts, and once we get through this, we'll certainly be assessing the situation," Robinson said. "We've had a myriad of issues in this past year in particular I think you're all well aware of, from incredibly difficult weather to loss of access to international markets to rail disruption after rail disruption. We're certainly at a point where our nation should be concerned that our government show leadership."

Meanwhile, on Monday, several Canadian business associations confirmed that they have been meeting to exchange information on the rail blockades' effects and discuss next steps.

"Significant economic damage has been done and will continue to affect Canadian communities, businesses, workers and their families for weeks to come as supply chains recover. The business community remains committed to working with government and Indigenous communities on reconciliation which is an economic and social imperative. Indigenous peoples must have the same opportunity to benefit from economic activity as everyone else," said a joint statement signed by the CEOs of the Canadian Chamber of Commerce, the Business Council of Canada, the Canadian Federation of Independent Business, and the Canadian Manufacturers and Exporters.

"The damage to Canada's reputation as a reliable supply chain partner and destination for foreign investment along with the severity of economic headwinds facing our country requires a serious, structured, and ongoing discussion between government and business," the joint statement said.